7.1. SR 03-20-2000 - Laserfiche WebLink

Home Browse Search

THE CITY OF ELK RIVER BENEFITS COMMITTEE JANUARY 28; 2000 MINUTES Members Present: Scott Harlicker, Cheryll Edinger, Marc Nevinski, Joan Frick, Bob Mahutga, Lauren Wipper, Lori Johnson Members Not Present: Steve Tillmann Lori Johnson handed out information to help explain the health insurance premium cost that the City is currently paying. "Here's why we straggle," are the words she used when she handed out the Claims and Loss Ratio History. These are the actual numbers that an insurance company looks at when they are calculating premium rates. What the Claims and Loss Ratio History shows is that insurance companies have been consistently losing money when they insure the City's employees. The Loss Ratios listed in the middle of the page show that the closest a company has come to even breaking even was Health Partners during the period of August 1, 1992 to April 30, 1993, and they still lost .52%. Scott remarked that he's "surprised we're even getting coverage." When we consider these facts, we are lucky that we can fmd insurance. We have had companies refuse to give us a quote for coverage. One year seven companies refused to bid and we were fortunate that Health Partners offered to renew the coverage - with a sizable rate increase. We have a history of needing to beg for coverage because we have a history of high claims. The other side of the Claims andLoss Ratio History lists the premium history for the City. In October 1994 the employee's out-of-pocket costs for family coverage were the highest at $431.52 per month. Bob asked if there was a way we could join with another group that has good loss ratios to help to make ours look better. Loft explained that that ~ exactly what we have been doing. In 1995 we joined the Medica Chamber of Commerce Coalition, which is a coalition for small groups. At that time, we qualified as a "small group" under state law but grew out of that classification shortly after we joined. We were able to stay with them as a large group because we had a contract with them until 1997. This was very fortunate for us. With the coalition we were guaranteed rate increase maximums of 6.5% and 6.0%. One year after starting the Chamber Coalition, Medica realized it was a bad business decision that would result in sizable losses. Medica discontinued offering the program but honored the contracts it had in place. In October 1998 we joined the Central Minnesota Service Cooperative and enrolled with Blue Cross and Blue Shield of MN. With the Coop we were part of a 7,000-member group of cities, counties, and other government groups. Currently we are part of a statewide group of Medica members. After these lengthy discussions, we moved on to "what's next". We decided that the first goal we would like to accomplish is to establish a full cafeteria plan that will offer employees more flexibility in their insurance coverage. Loft Johnson will look into what